The pandemic has had a massive effect on lives across the world. In particular, the leisure and tourism sector has coped with businesses being closed for…
As pandemic-related spending has already reached £280bn the Chancellor, Rishi Sunak, has announced further funding and boosts to the economy and jobs.
The Coronivirus Job Retention Scheme which has protected 11 million jobs will be extended until September 30, well beyond the mid-June date for when the Government’s reopening roadmap indicates lockdown will fully end.
Furlough will be extended until the end of September with the employer contributing to the scheme from July and the Government tapering their contributions.
The Chancellor has confirmed that as part of the Governments £100bn package. The scheme will continue at 80% and will then taper with employers contributing 10% from July and 20% in August and September. Employees will continue to receive 80 per cent of their salary for hours not worked until the scheme ends. The employers’ contribution will be in addition to their National Insurance and pension payments, which they pay at the moment.
It costs around £5 billion a month now to support jobs in this way.
If you would like more on the detail of the Job Retention Scheme itself – please read our previous blog here.
Support for the self-employed
The Chancellor has also announced further support for self-employed workers, with more than 600,000 people – many of whom become self-employed in 2019/20 – now eligible for cash grants.
A fourth grant from the Self-Employment Income Support Scheme (SEISS) will be available to claim from February until April, worth 80 per cent of three months’ average trading profits up to £7,500. It will be open to anyone who filed their 2019/20 tax return by midnight last night.
The Treasury said that hundreds of thousands more people will be eligible for the grants this time, as tax return data for 2019/20 is now available.
A fifth and final grant will be available from May onwards, worth three months of average profits. This will be open to claims from late July. The Chancellor intends for the fifth grant to be more targeted at those most affected by the pandemic and although for those whose turnover has fallen by 30 per cent or more will continue to receive the full 80 per cent; those whose turnover has fallen by less than 30 per cent will receive a reduced grant of 30 per cent.
All other eligibility criteria will remain the same as the third grant and those details can be found here
The extra £20/week on Universal Credit will continue for another 6 months, with Working Tax Credits seeing equivalent support with a one off payment of £500.
Support for hospitality, leisure, tourism and non-essential retail businesses
Support for those businesses worst affected by Covid – retail, hospitality and leisure businesses with non-essential retail receiving up to £6,000 per business premises and £18,000 for hospitality, accommodation, leisure, personal care and gyms. These will be administered by Local Authorities as per previous grants.
More detail on restart grants can be found here (and will be updated once more information is released).
Business rate holiday
An extension to the business rates holiday for retail, hospitality and leisure businesses amounting to 100% relief until the end of June and then a cut of two-thirds to the end of the year.
5% VAT rate extension
The cut to the VAT rate for hospitality, accommodation and attractions is extended until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.
Loans to businesses
A new loan has been introduced to take over from CBILs and Bounce Back Loans. The new Recovery Loan is available to businesses of any size for amounts from £25,000 – £10m and invoice finance between £1,000 and £10m all loans with a Government guarantee to lenders of 80%. More detail on these can be found here.
The scheme will be open until the end of the year.